§ 674 - State guarantee of company obligations
§ 674. State guarantee of company obligations
(a) A Vermont small business investment company approved by the board and licensed by the United States small business administration may request that the board authorize state guarantees in accordance with this section. The board is authorized to guarantee payment on securities, or other financial instruments and obligations issued by a company. Such guarantees shall be made by the board on such terms and conditions as it deems appropriate, pursuant to rules adopted under subsection 673(b) of this title. The full faith and credit of the state is pledged to the payment of all amounts which may be required to be paid under any guarantee under this subsection. The board shall have a claim against the assets of the company on behalf of the state for any payments made by the state pursuant to guarantees authorized by this subsection. Any such claim shall be made subordinate to the obligations of the company to the United States small business administration and to the total private capital related obligations of the company to a maximum of $3,000,000.00. Such guarantees shall expire no later than 15 years after the date of issuance of the obligations.
(b) The total amount of contingent and noncontingent liability of the state pursuant to guarantees of the board outstanding at any one time on securities, or other financial instruments and obligations issued by a company shall not exceed one-third the amount that the board determines, in accordance with rules adopted under subsection 673(b) of this title, are the total private capital related obligations issued by the small business investment company, or $1,000,000.00, whichever amount is smaller. (Added 1991, No. 61; amended 1991, No. 218 (Adj. Sess.), § 2, eff. May 27, 1992.)